Ras Al Khaimah-based RR Holdings, the holding company of Beximco LPG of Bangladesh and Dubai's IOC Middle East, a wholly-owned subsidiary of Indian Oil Corporation, have signed an agreement for the formation of a 50:50 joint venture company (JVC) for LPG business in Bangladesh.
LPG (liquefied petroleum gas) market in Bangladesh has seen a five-fold growth in the past five years and is expected to grow at a CAGR (compound annual growth rate) of 12-13%, reports Trade Arabia.
The JVC will draw strength from the core competencies of IndianOil and the local expertise of Beximco.
As per the business plan, the JVC would begin functioning by acquiring Beximco's existing LPG assets.
Dharmedra Pradhan, minister for Petroleum & Natural Gas and Steel of India, said that the agreement is a major milestone in the annals of India-Bangladesh cooperation when a group company of Indian oil based in Dubai is joining hands with one of the most promising LPG companies in Bangladesh through its holding company in UAE for LPG business in Bangladesh.
Salman Fazlur Rahman MP, Private Industry and Investment adviser to the Prime Minister of Bangladesh, said, "The JVC should serve as a testament to the remarkable investment potential of Bangladesh. At a time when the entire world is grappling with the severe economic consequences of the Covid-19 pandemic, this investment also reflects the resilient and enduring friendship between Bangladesh and India."
"As Bangladesh's middle class is rising with higher purchasing power, the LPG sector has seen an exponential boom over the years and is set to grow further in the coming years. As such, a partnership and investment at this scale between two experienced and major players has every potential to be a true game changer in the industry," said Nasrul Hamid, minister of State for Power, Energy and Mineral Resources of Bangladesh.
Sanjiv Singh, chairman of IndianOil, said, "We intend to set up a large LPG terminal at a deep-water port in Bangladesh, which would facilitate receipt of LPG in Very Large Gas Carriers, leading to reduction in cost of imports. Reduction in cost of import would help make LPG available at an affordable price to the people of Bangladesh."